Tue, 22/01/2008 - 06:00
RAB Capital, the AIM-listed hedge fund manager that is currently grabbing the headlines as a near 7 per cent shareholder in stricken UK mortgage bank Northern Rock, expects to report the barest income and profit growth for 2007 despite a surge of nearly 40 per cent in its assets under management.
Net income for the year was approximately GBP135m, compared with GBP132.5m (restated for the adoption of IFRS accounting standards) in 2006, the firm has announced in a trading update, while pre-tax profits are expected to exceed GBP50m, compared with GBP50.6m a year earlier.
Net income included management and performance fees of GBP123m, up from GBP119m in 2006, investment gains of GBP10.9m, down from GBP12m, and interest income of GBP4.2m, compared with GBP2.4m. Management fees represented more than 40 per cent of total fees, up from 28 per cent a year earlier.
Assets under management at the end of 2007 totalled USD7.2bn, a 38 per cent increase from a year earlier. A strong first half of 2007 was followed by more difficult trading in the third and fourth quarters when credit and liquidity issues had a negative effect on equity markets.
Founded in 1999, RAB Capital currently manages 17 absolute return strategies (15 single strategy and two multi-strategy) each with assets in excess of USD100m, up from 12 a year earlier, as well as the Aim-quoted RAB Special Situations investment vehicle.
In challenging market conditions, the group says its investment strategies delivered commendable performance, as indicated by the estimated net return of 10.2 per cent for the year achieved by the RAB Multi Strategy Fund, its internal fund of funds.
During the year RAB Capital strengthened its Asian presence through the acquisition of the business of Pi Investment Management. In October, the group opened its first overseas office in Hong Kong, both in support of the Pi acquisition and to improve its access to Asian markets and marketing capabilities. The firm also took a 20 per cent shareholding in Japanese distributor Prestige Asset Management.
'This performance represents a solid result in the face of difficult markets and is a reflection of the diverse range of investment strategies that we manage,' says chief executive Philip Richards. His colleague, executive chairman Michael Alen-Buckley, adds: 'Further product launches and improvements in our marketing and infrastructure improve the scope of RAB's opportunities for 2008 and beyond.'
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